tv Bloomberg West Bloomberg March 21, 2015 4:00am-5:01am EDT
cory: from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on innovation, technology and the future of business. i'm cory johnson. every weekend we bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. the san francisco 49ers are getting ready to host the super bowl right in the belly of silicon valley. i spoke with a big 49ers fan.
i got some of jedd's comments. we met four or five years ago. i went to see him and said how can i help? cory: this new thing is a huge deal. when we first met, i was arguing the importance of having a stadium in san francisco. you chose santa clara. it is a technical marvel if the heart of this world of technology. what do you want to do there? i think we wanted to bring out the best of the bay area. chris: in terms of technology what are you wanting to do?
>> want to make sure it is a seamless troigs the game 3678 make sure that everything that is difficult about going to a game, we want to make that seamless. we want to make sure that you can use wi-fi to enhance your experience at a stadium. >> the technology is so cool that he is bundling it and creating it as a company and taking it on the road. can you talk about that a little bit? >> sure. the company we helped incubate levi stadium was a petri dish. now our c.e.o. is taking it to other sports venn use around the world. cory: interesting. first they started streaming and now they are streaming hbo. do you think you have some advantage there?
it is revolutionizing the venue and in game experience for fans. it is allowing the fans to know the venue better. cory: there is a guy named mark cuban. >> heard of him. cory: he owns the dallas mavericks. , mark cuban, he approached a reconstruction of that has a lot of the same ideas. i do not know if he would say so, but it feels like he would say, i do not want every technology. he told bloomberg there is no question people use phones and devices at games, but they use them when they are bored. they don't want more reasons to use them. they want fewer. how do you balance that with the experience of being at the game? jed: fans are going to use the phones. that is what people use and that is what they're going to do. instead of having them get up and go stand in line for a beer, you can have it delivered for
you. instead of standing in line for a restroom, you can use the phone and say, the line is red and two sections down it is green. it is easier to get in and out. you want to make sure that again, those points are taken out of the live venue experience. maynard: one thing i use is i get to control which plan want to replay and when and how. so often, you are on a break and waiting for the camera to come back. i can look at a play and replay it any time. cory: i was really struck. i went to a couple games at levi stadium and i caught some great weather and there was a lot of fun. i went to a game with crummy weather in seattle. where my favorite team, the 49ers is playing in seattle. it was a great game. unfortunately they lost, but the difference i noticed was particularly this
new stadium. the seats at levi stadium were pretty empty right after halftime. in seattle, it was packed and they were passionate and i thought that gave the team an advantage. do you think about developing technology and how it will affect what is happening on the field? the 12th man is an important deal for every stadium. jed: again that is part of the technology, getting people to stay in their seats and not have to leave and go back to the bar and everything else. for the first year at levi stadium, they are still trying to figure at the venue and figure out everything that work and does not work at levi stadium. it is a lot different than candlestick. from zero amenities to a lot of amenities. trying to transition to the next generation and really making levi is new home of the 49ers. cory: the super bowl, are the niners going to be in it and what are you going to do to make them get ready?
>> we have a long way to go for the 49ers. for the bay area and levi stadium, we will be the most philanthropic super bowl to take place. we are putting $2.5 million back into the community already. the super bowl 50 fund announced that just last week. we have got everybody in the bay area working together from san jose to san francisco. when you offer the best of the bay area, it will be an unbelievable week. cory: here you are trying to manage one of the most important businesses flat out in a pro bowl of business leaders whether it is tim cook or all of the other people i cover that i will not be so nice to on the air. but i think world of sometimes. you have got to be one of these managers around here. the big news of the day, a 24-year-old linebacker after a breakout year. fantastic draft pick by you guys, announcing his retirement what do you make of it? jed: we respect it. i love chris.
he is a great kid. it is certainly a surprise to us and some teammates. you have to respect that decision. if he fears for his health and safety going forward, i do not want someone going out there and doing something i would not feel comfortable doing. i would never try to talk someone out of retirement. it was not an easy decision for him but we respect him and wish him the best. cory: you go across the defensive oriented team, you have got pat willis retiring and it is unclear what is happening with justin smith. you have chris borland leaving. do we know what's happening with justin smith yet? jed: he has been working out with the guys. he is in the decision-making process. we obviously would love to have justin back. he has got to be comfortable going out and putting his body through it one more year, and if he is not, we will have to step up and have someone else take that place. cory: you made a tough decision. about your coach. you said it was mutual and he said it wasn't. i do not really want to get into
that, but when you make that kind of decision about moving forward as a leader, the fans, since we said the interview is happened, questions and e-mails, how could you let that guy go, even if everybody hated him? bill belichick, we talked about it earlier, great coach. not universally loved. bill parcells was a great coach. despised sometimes by his own teammates and his own players. what matters besides winning? jed: things off the field obviously matter. we are trying to win a super bowl. everything that we do, we are trying to win a super bowl. we haven't been able to do that. what we're trying to do is build a team that focuses on core strengths. like any other company you want to talk to. you will focus on core strengths i think we got away from that little bit and tried to be too much of something that we were not. you will see them get back to the basics and let them make plays. that will give us an opportunity to get back.
cory: was har but a not doing that? jed: you look at our offense last year. it was not where it should have been. we have better talent than what our results showed. i am not the experts in terms of calling x's and o's and writing plays and doing things like that. i know our players are equipped to play the game and compete for championships. we need to make sure these things are together and moving forward and giving a chance to ultimately host and win the super bowl this year. maynard: speaking of the super bowl, what is it you would like silicon valley and the san francisco bay area to do to help you make sure this is the best super bowl ever? jed: getting the 49ers, that would be a great way to make this a great super bowl for the bay area. ultimately what you want, watching mayor lee work with mayor matthews, bringing everybody together and making sure we put on the best face
and working together, when you work together as a unit, i do not think there is a better place in the world. cory: i feel sports is a metaphor that is why we all love it it it seems clear. there is a score at the end of the day. that is why i love talking about sports as a metaphor for business, when you look at -- you were talking about the offense as a problem for the 49ers. you hire a defensive coach. do you look around silicon valley to make that make sense. the fans fans look at that and say, offense is a problem. why did you hire a defensive guy? jed: that is a good question but i think the coach has seen this team transition from an average football team to a really good football team, trying to focus on what we have done well and making sure you have somebody who knows the quarterback well, who can run the offense, building the right staff around them, making sure
we get back to running the football and making sure that we get back to doing things that colin is good at. let him use his athleticism. do not try to change the offense week to week. stick to what works. it's a great question on the surface. an offensive-minded guy being your head coach. look at bill belichick. he is a defensive minded guy. he's won four super bowls. a lot of coaches have had great careers. most of them have been defensive-minded. when you look at the long game it is about making sure everything works together. not just offense or defense and not just special teams. it is making sure all three of those phases work together. that is what we want. we want an entire team of 53 and not just individual units. cory: the question of leadership and making decisions. if the super bowl the only
answer, is that the only way, the only goal that could work? if the next coach doesn't win a super bowl, is he gone? maynard: let me talk about business. you have to produce results. day in and day out. you have got to get voted on the team every year and every day. you have to produce results. you have to make sure you build a team that can produce results for tomorrow. cory: we'll be right back. ♪
damages. there have been plenty of big name witnesses. she said it is the best place to be a woman in the business. brad there is a great it is a story that makes the shudder. guest: it has done best job of bringing women into the firm. evangelizing for female-led entrepreneurs. here they are. ironically being hauled into court by one of their junior partners. as the lot of what the valley has been talking about. these very visible forms of sexual harassment in the workplace. that is what the ellen powell case is about.
whether she was treated differently than the male partners. cory: i want to get to the specifics of the case. i think that is why this resonates. here we are, two white dudes but that is kind of a common scene in silicon valley, where men far outnumber women wear white dudes and asian men outnumber women as well in the workplace. guest: when the case was filed, it was before "lean in" and before tech company started releasing their dismal showings. it is a world in which it is called out when you make calls. everything is very sensitive to all the things mentioned in the case. like where she sat at the table and whether she was told she had to take notes, even though she should have been at the same level as the men.
that is really the thing people look at here and think, i have seen myself in that it i have talked to a lot of women in tech and i do not know what happened to ellen pao will, but i do know that looks a little bit like me. cory: let's look at the specific case. she is alleging that she was kept out of meetings, that she did not get the same seats on the board that males got. is that the essence of her case? guest: there is more to it. i think one of the more powerful allegations she said it this week, the kind of behavior she was criticized for was exactly the kind of behavior prized in the male partners. being combative, having strong opinions, having sharp elbows with colleagues. she had negative performance reviews. she is alleging there was a double standard. there are other complicated parts of this case that make it a trial. she had a consensual affair with a coworker and after they broke up, the coworker made her life miserable.
ened that the firm was too slow to fire that co-worker. cory: let's talk about that affair and what that meant to the business. this is a senior partner at the firm, a married senior partner at the firm. a few details emerging from the child pair that seems to be a central part of the complaint, that in some way, it was consensual but should not have been allowed in that they were treated differently when it came out. guest: yeah, in this case, it is interesting to look at ellen pao. she is not some perfect symbol of a woman being wronged. she is a complicated character. she had an affair. sometimes, maybe she could do everything to get deals done, and she is saying, you should have listened to me when i did this or that, but a lot of the trials are really hinging on is she likable? is she somebody that we can
trust, is she somebody in a position to be at the firm, whether or not she is a woman, just raced on her personality? that makes it a lot murkier. cory: in the world of finance, it is interesting to me. mary worked for years and years at morgan stanley. she was an analyst. she made some -- she made some really bad calls in her early days and plenty of good ones. i am sure she heard of that from the trading floors where the environment is anything but warm and welcome. especially to women. when she compared what perkins was like having left a career at wall street, she said it was fantastic. guest: that's right. an irony here is that they have done a better job not only in investment banks, but at other venture capital firms. if you look at the website, they
cory: i'm cory johnson. this is the best of "bloomberg west." here are some of the stories that made headlines in technology last week. go daddy plans to sell 22 million shares between $17 and $19 apiece. by comparison, it comes three years after the company was taken private. it was a $2.3 billion deal.
they posted a loss last year despite revenues of $1.4 billion. closing its office in and cutting between 200 and 300 jobs according to people familiar with the matter. yahoo! does not offer any products in china. they are under pressure to cut costs. am will accept android phones under a trade-in program. apple started the i-phone trade in program in 2013 trying to encourage people to upgrade but expanding the program to other phones they want to accelerate market share gains. these days you're probably using apple or android phones for work. what if you don't work at a traditional employer? you're a freelancer. where can you find health
insurance? enter stride health. guest: these are individuals now, one in every three american workers, 60 million american workers by the end of the decade that are on their own. right? they love their freelancing lifestyle. taking fractional work when it makes sense in their days or weeks but they are on their own when it cops to picking healthcare coverage and understanding how to navigate that system throughout the year. cory: what do you do to help guest: we're a mobile first web app. we help them build a health profile about themselves that we can use to forecast their healthcare use for the rest of the year. it is a fairly complex on the back end but for the user fs simple. cory: you look at what the insurance companies have to offer and you -- for them?
guest: we don't just drive you to an insurance company. we stick with you. we build this profile for you sort of like an advisor that will map you to the right decision. cory: a robo advisor? guest: sure. we enroll you in that health plan. you'll get your government subsidy if you qualify for one. cory: is obamacare, the affordable care act, been a thing that led your business to a fast rate option? guest: it is one of the things. it structured health plans so they would be more machine readable so we can create an index of all the health plans on the market. cory: to parafrade phrase, the affordable care act made the plans codified and n similar ways so they can be compared?
guest: yes. used to have fre form texts. very hard to figure out as a individual or a machine. cory: you have been -- you're doing it across many states, california texas, new york, so on. are you picking it by markets size or the ease of doing business in those states? insurance regulations are a mother. guest: the largest states out there. we cover 44% of the u.s. population across seven states. that is very good coverage without too many markets. we're regulated like an agent or broker. it is an ancient model. it has been around for the last 50 years. cory: it is interesting that you're matching with these new economy companies. guest: absolutely. they are gathering freelancers
cory: you are watching best of "bloomberg west" where we focus on the future of business. elon musk has a message for model s drivers who have range anxiety. guest: will i run out? it's impossible unless you do so intentionally. cory: when he says impossible it's still possible. the software will alert you to the nearest charging station. he says the tesla will have
charging stations in most of the 50 states by next year. the new model x will hit the road this summer. will this sues fears that the battery will calm cap. this guy is important in the world of batteries. guest: the battery is basically a set of computer batteries. they are repackaged for the tesla. his announcement that he is going to make an announcement is strange because tesla already goes farther than most electric cars. i think we are curious about what he is going to say. cory: i wonder as it relates to argonne you guys are pushing the envelope much further than tessler. -- tesla. i wonder how you look at tesla. why did we just get some duct tape and do what tesla is doing?
guest: there is a very solid answer to that. lithium ion batteries just don't have in itself to go more than 50%. that is more than what it does now. it is not possible. we are taking the next step. we want to look beyond lithium ion and get something that is electrified better and that is something that lithium ion can't achieve. it's very aspirational. it's very visionary and aggressive. we think we can do it and the community will agree. we gave ourselves a short timescale. it might take longer than five years. i think the answer is out there. cory: i don't want to get into the weeds with this. it's interesting how tesla has used the infrastructure of tax credits to fund the business and development.
maybe that's one of the reasons why they couldn't wait. if you look across the map of all the places you can get tax credits for building cars, as long as they are selling cars in a list of states, they are getting tax credits based on how the cars they produce to be sold in those states. is that something that factors into the economics of what you guys are doing and how do see tesla benefiting from that? guest: i think that is one of the motivators for tesla. he is smart enough to figure most of these things out. i don't think it has a big on what we are doing. what we are producing we hope to transfer to manufacturing in a few years. it will take the manufacturer another three to five years to bring it out. we are talking about something
that is 10 years out from now. the tax structure is probably going to be different. cory: tesla sees 33% of their gross profits from these tax credits. tesla says that's going away. is that worry some about how this business works? guest: they have to try hard to get the market bigger. that is a sign that the present revenue generation mechanism is shrinking. that means he needs to sell more cars. that is one reason for the announcement tomorrow, to make it more appealing to people to buy a tesla car or the next generation tesla car. cory: george crabtree, we will be right back. ♪
cory: i'm cory johnson and this is the best of "bloomberg west". his computer was infected by a virus. he launched one of the most profitable security companies in 1997 and based in moscow. they have 400 million users. how does affirm so tied to the russian government do so much international business? guest: it's not the same as it was. in the past they were just vandals students writing
viruses. they were just individuals. then the threat grew and they became organized and professional. then they were facing espionage. now it's even different. traditional crime is coming to the cyberspace. software engineers support traditional crime. it's not a cybercrime it, it's a traditional crime. we are in a very, very interesting business. it's a cool place to be in. cory: when you say traditional crime, what do you mean? guest: the petrol stations or
the coal mines they use seaports to transport cocaine. they know which containers have cocaine, so they unload containers to get past border controls. they happy petrol station to steal petrol. or they hacked the coal mine to steal coal so it is not loaded onto trains. they steal coal. the company had stolen coal. guest:cory: you have been operating
in the united states for 10 years. do you see this happening in the u.s. as well? guest: i am pretty sure it is here. these problems are global. unfortunately they trade technology and they speak many different languages. what is going on in the rest of the world is in the united states as well. cory: let me ask you a question, why are there so many hackers in russia? guest: russia is rich with software engineers thanks to the technical education system. they are the best.
russian software engineers are the best. on the other side of the coin criminals are the best. cory: i won't blame you. i wonder what it's like running your anti-hacking organization in a nation filled with hackers. at that must raise some interesting challenges. guest: we are a very strong presence in many nations. being in the nations where we have the source, we benefit from that. we see them before our contingents see it. we can report on the types of attacks. cory: he is the founder of a security company. we will be right back. ♪
cory: this is the best of "bloomberg west" and i'm cory johnson. rhapsody is making its a available to twitter users. here is how it works. subscribers will be able to post songs on twitter for followers and friends to listen. they will open a page that has a link back. this is after twitter failed at building a music out. is this a game changer for music and twitter? i spoke with david at the sxsw conference in austin. guest: it's amazing with all of the new streaming services that exist and people are listening to it on their phones and
headphones, it's a lonely experience. we thought, why not make it socially again and partner with twitter and take advantage of their audio card. cory: bringing music to mobile and going back to the ipod seems like it's reviving the music industry. the licensing quality, how much money apple was able to hold away from the publishers hurt the industry. more listening, less money, what's the background? guest: we had to make a decision as rhapsody that we would pay for the music that people listen to on twitter. the reason we are doing that is because we want to expose the world to the fact that streaming music exists and rhapsody is here and has been here for a long time and we have a fantastic growing subscriber base. it's still very early days.
less than 1% of the people in the world are using a subscription music service. we want to educate the market that you can listen to music and artists and get paid and you can have access to all the songs in the world. cory: this is going to come out of the not deep pockets? guest: that is true. it comes out of our pockets. we are making a sound business decision we believe. we are advertising to streaming music and rhapsody to the twitter user base by paying for the music. in return, as people get educated and understand that streaming music is possible and that it exists and we have a fantastic service, they will engage with our product and we will get more customers. we believe it's a sound business decision irs -- bios -- by usd.
the artist gets paid and it's better for us. cory: you are bringing people back to rhapsody hoping that some percentage of them will subscribe to your service. talk to me about -- the you think about it that way? the response could lead to real business for you and a real successful marketing effort? guest: if you think of it like advertising, the conversion rates for apps are fairly low the single digits, but it works. today's social way of what we used to say where people would send you mail for direct response, that worked for a while. what works today is social.
we have hit on something that we believe is going to work great. if it doesn't, we will stop. in the meantime, we think the fact that you have to be a rhapsody user to share music on twitter will drive people to that. once they are in the app there is nothing better than having all of the music in the world in your hand. you can listen to it all the time and take it with you. as our customers experience this, we get more and more customers. cory: we are not in a post radio era but radio is different. music discovery seems to be the great mystery of the new world of streaming music. a lot of music is available. finding new music has gotten any simpler. you could argue it's got more complicated. guest: this is why we think twitter is so important.
where do you listen -- where do learn about music? from your friends and the people you know. people used to hang out and say, what are you listening to? that has been lost. everybody has their own app and headphones by themselves. twitter provides the opportunity for you to share your music, what you like and people can follow you and check it out. we hope they get excited about sharing music on their own. cory: what's happening right now with bmi ascap and how does that differ from the demands of the labels? guest: i would say in general that our service from the beginning has been set up to pay rights holders for their music. we created this model of all you can consume and then pay on the backend.
we pay a lot of money. we continue to believe that it's important to do that. we just want to have equal rates to the rest of the entity. we will compete with a great product and innovation for customers. cory: that was david hose of rhapsody. we'll be right back with more of best of "bloomberg west"." ♪
they are trying to take it further. they have artists and fans with money in between. i learned about it from the ceo. guest: this idea is there is a new emerging creative class. it is hundreds of thousands of people that realize they can be creative entrepreneurs. cory: they don't have a label and a $50,000 advance. guest: it's the opposite. it used to be that there were three pipelines to the people for the masses and there were people that controlled those pipelines and it's not that way anymore. if you have some great to say, people will listen. we have awesome platforms for master submission. the idea is you create a page and you go to your fans through whatever channel you have. it's one dollar per video. we have some people paying $100
every time somebody releases something. cory: you have fans buying a subscription to the work of an artist? guest: the artist isn't saying you can't watch this unless you give me five dollars. i am making stuff anyway, if you want to pay me five dollars a month you can. if you do, you get all this other cool stuff. cory: didn't louis ck do something like this? if you want to throw some money at me, i would appreciate it? guest: he sold his, special direct with to his fans. he made over $1 million in sales. i've been a professional musician for the past 10 years. that has been my living. i am not taking a salary, i'm making my living using the product itself.
my fans pledge a little over six 500 -- six $500 per video. cory: you try to make it with a budget of at least $6,499. does this let you change the way you do your work? you can actually have an income? guest: having a regular budget as an artist is the coolest thing ever. other artists can tell you money comes in chunks in this field. you will go for six months with very little income and then get a big licensing deal. it's hard to budget when you have such irregular bursts of income. when we release a video, we know we are going to get a check. cory: i know people have tried this with youtube. people found that they were even getting beer money.
is this dependent on the charity of strangers? guest: you could call it charity, i don't like thinking of this as a charity. i just love some creators so much. it's a feeling that i have this difficult to describe. i want to pay them to make more stuff. this is a classical feeling. that's how every piece of great art we know has been made, and the sistine chapel. cory: there were patrons. it was smaller groups, not infinite groups. guest: now you have the crowd. now you have everybody. instead of depending on one rich person to give you $1 million, there are one million people to give you one dollar. cory: what was your inspiration? guest: i had spent three months
working on a robot music video for myself. it was a serious robotic music video with a robot and ahead and they were singing and dancing. it took me three months to make. i spent $10,000 making the video. i knew it would make half-million hits on youtube. that leads to very little and revenue. that was my last check was $74. cory: you were doing at tech video, that made you think of this? guest: the connection was i'm going to get a half-million hits and people are going to enjoy it. they will tell me they enjoy it and it's going to lead to $70. that doesn't make sense. that should not be worth $70. i won't buy it. i don't buy it. cory: that doesn't for this